Following a slump in revenue in the first quarter of 2022, hospitality company Sonder recovered in the second quarter with revenue of $121 million, up 157% year-on-year.
San Francisco-based Sonder says revenue was fueled by RevPAR growth, its newer pricing strategy targeting higher occupancy and the expansion of its live unit portfolio.
RevPAR for the second quarter of 2022 was a record $167 - a 67% year-on-year improvement - and occupancy was 82%, up 86.3% year-on-year. Average daily rate for the quarter was $203, a 38% improvement year-on-year.
Live units grew 53% year-on-year to 8,400 in Q2 2022 and bookable nights grew 53% year-on-year to 725,000. Sonder’s total portfolio for the quarter was 18,700, a 26% improvement over the corresponding period in 2021.
Operating cash flow margins improved from negative 118% in Q2 2021 to negative $41 million, while free cash flow improved from negative 127% in the second quarter of 2021 to negative 37%.
Free cash flow improved by $17 million compared to the previous quarter before cash restructuring costs of $2 million, while revenue grew at a clip of 51% versus Q1 2022 and 157% versus Q2 2021.
“We remain incredibly focused on delivering on our Cash Flow Positive Plan, where we expect to reach positive quarterly free cash flow within 2023, without additional fundraising, while also preserving a robust cash cushion. We remain confident that successfully executing this plan will drive sustainable long-term value for all our stakeholders,” co-founder and CEO Francis Davidson says in a letter to shareholders.
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Adjusted EBITDA for the second quarter of 2022 was a loss of $52.6 million, an improvement over a loss of $83.5 million in Q1 of this year. Net loss for the quarter was $43.8 million, an improvement over a loss of $74 million in the corresponding period in 2021
Sales and marketing expenses for Q2 2022 were $12.4 million, up from $4.9 million in Q1 2022. Sonder signed 400 companies to its corporate program in Q2 2022, up from 250 the previous quarter.
In Q3 2022, Sonder anticipates revenue greater than $120 million, primarily due to an expected growth in bookable nights and live units, offset by a lower RevPAR.
Founded in 2014, Sonder made its debut on the public markets via a special purpose acquisition company (SPAC) created through a business combination with Gores Metropoulos II in January of this year.